Mortgages - Help Please - it's a while since my GCSE maths!
Discussion
Hi
As many others I guess, I am trying to work out if I'd be better of paying my ERC and taking a new fixed rate mortgage. I have 20 months left of a 5 year fixed rate of 1.89%. New deals seem to be at 3.73%.
Are there any calculators/spreadsheet templates I can use to run the maths to determine whether it would be advantageous to change (I might run projections of fixed rates increasing to say 5% and 7% etc)?
I hope this makes sense? Any assistance would be much appreciated.
Thank you.
As many others I guess, I am trying to work out if I'd be better of paying my ERC and taking a new fixed rate mortgage. I have 20 months left of a 5 year fixed rate of 1.89%. New deals seem to be at 3.73%.
Are there any calculators/spreadsheet templates I can use to run the maths to determine whether it would be advantageous to change (I might run projections of fixed rates increasing to say 5% and 7% etc)?
I hope this makes sense? Any assistance would be much appreciated.
Thank you.
what is the early redemption charge? Personally with 20 months to go at 1.89% I find it unlikely that you would be better off paying the charge and going for a five year fixed 3.73% deal.
First of all you would be paying double for the next 20 months on top the the early redemption charge. Interest rates would have to increase by quite a margin in the next five years for you to actually be better off changing now.
I would personally stick and enjoy the 1.89% for the next 20 months.
First of all you would be paying double for the next 20 months on top the the early redemption charge. Interest rates would have to increase by quite a margin in the next five years for you to actually be better off changing now.
I would personally stick and enjoy the 1.89% for the next 20 months.
Two calculators I use for stuff like this are....
https://www.moneysavingexpert.com/mortgages/mortga...
And
https://www.thecalculatorsite.com/finance/calculat...
https://www.moneysavingexpert.com/mortgages/mortga...
And
https://www.thecalculatorsite.com/finance/calculat...
Of you are considering this it suggests that you have some savings and/or the ability to afford a higher payment each month.
Would it not make more sense to over pay or at least put some money to one side until the end of your fixed deal. When the time comes your mortgage balance will be smaller or you will have a lump sum to put against it meaning that you will be better placed to weather a higher interest rate.
Unless you went into a very long term fixed deal now (10 years) I can’t see how you would really benefit from going into a significantly more expensive 5 year deal even if rates have increased further when your existing deal comes to an end.
When considering paying the ERC and increased rate now the break even rate at which it makes sense must be pretty high depending upon the size of your mortgage.
Would it not make more sense to over pay or at least put some money to one side until the end of your fixed deal. When the time comes your mortgage balance will be smaller or you will have a lump sum to put against it meaning that you will be better placed to weather a higher interest rate.
Unless you went into a very long term fixed deal now (10 years) I can’t see how you would really benefit from going into a significantly more expensive 5 year deal even if rates have increased further when your existing deal comes to an end.
When considering paying the ERC and increased rate now the break even rate at which it makes sense must be pretty high depending upon the size of your mortgage.
GE90 said:
Hi
As many others I guess, I am trying to work out if I'd be better of paying my ERC and taking a new fixed rate mortgage. I have 20 months left of a 5 year fixed rate of 1.89%. New deals seem to be at 3.73%.
Are there any calculators/spreadsheet templates I can use to run the maths to determine whether it would be advantageous to change (I might run projections of fixed rates increasing to say 5% and 7% etc)?
I hope this makes sense? Any assistance would be much appreciated.
Thank you.
OP I’m in almost exactly the same position. 5 year 1.99% due to expire in March 24 with a 3.2k ERC today.As many others I guess, I am trying to work out if I'd be better of paying my ERC and taking a new fixed rate mortgage. I have 20 months left of a 5 year fixed rate of 1.89%. New deals seem to be at 3.73%.
Are there any calculators/spreadsheet templates I can use to run the maths to determine whether it would be advantageous to change (I might run projections of fixed rates increasing to say 5% and 7% etc)?
I hope this makes sense? Any assistance would be much appreciated.
Thank you.
I’ve done quite a bit of research and it’s all pointing to likely end of 23/ beginning of 24 will be the peak of the rate rises. Base rate is projected to be 4.25 so the banks will offer 5.5 -6 roughly depending on your LTV history etc. Of course this could be off, but you can only go on what information is available and some luck thrown in.
I cannot run the numbers to show how it would benefit paying the ERC now and locking in a higher rate now. My plan is to overpay now, and the minute your eligible lock in a new mortgage product 6/5 months before yours expires. Hopefully that would catch 1 maybe 2 hikes just before the peak.
Gassing Station | Finance | Top of Page | What's New | My Stuff